European harvest started: this is what the figures say

The European wheat futures market Matif has used June so far to bounce back from all the price cuts in May. It is not so much the heating of temperatures, but the tragic battle in Ukraine that has the market in its grip. The destruction of the Nova Kakhovka dam and an ammonia pipeline has major consequences for the (political) course. The grain market is also part of this emotion.

Matif in green
On Monday, June 12, the Matif will turn green again with a price that fluctuates around €236 in the afternoon and reached €238 earlier that day. That is an increase of several euros compared to Friday's closing price. The Paris quotation for grain maize is also up for both the old and new harvest. Rapeseed is the only commodity that turns red.

Coceral, the federation of European grain and oilseed processors, published its third yield forecast for the EU12 and the United Kingdom on June 27. This amounts to 296,7 million tons. A decrease of 6,8 million tons from the previous forecast, but still 2% more than was harvested in 2022. Drought in the north of the EU has caused the numbers to drop. The forecast for wheat has decreased to 142,4 million tons.

less corn
Less grain in Germany and Spain has an impact on yield figures. In France, according to Coceral, it is not so much the weather that has an impact, but rather a smaller area, which is especially the case for grain maize. Hungary, Romania, Bulgaria and Italy are performing significantly better this year because this season has received much more precipitation so far than in 2022.

The first combines are now driving around in the center and south of France. Winter barley was harvested in small quantities at the beginning of June. While further north we are dealing with the first regional heat wave, further south it is changeable. French barley crops have suffered greatly from the dry weather this spring. Yields fluctuate between 5 and 7 tons per hectare.

FranceAgriMer reports that 88% of all winter barley is in good condition and 91% of all wheat. A year earlier that was about 65%. Yet French arable farmers, especially in the center and north of the country, fear for the yield. Wheat in particular is currently suffering from the drought.

Washed numbers
The monthly Wasde report was published in the US on Friday evening Dutch time. The figures were not very shocking. Despite the fact that the US Department of Agriculture expects more tons of wheat, corn and soybeans, the markets did not react negatively. Prices in Europe and the US actually closed higher. Globally, the USDA expects a record harvest of 1,219 billion tons this season. The closing stocks for the current and next season are also increasing.

Drought also plays an important role in the US. Last weekend many parts of the country experienced showers, but they were very widespread. The precipitation pattern is therefore erratic. The weather models continue to expect dry weather in the Midwest, while more rain is expected in the northern part of the US.

Grain deal
Back to the European scene where the unpredictable Russian factor hangs over the market like a dark cloud. Analysts believe that the wheat market could rise further this week. The first resistance is at the €245 per tonne point. Much depends on a new extension of the grain deal between the West and Russia. It expires on July 17 and its extension remains a hot topic. The blowing up of an ammonia pipeline, which runs from Ukraine to Russia, is a current point of contention. The export of grain and fertilizer is an important issue for the country. Export may not be officially hindered, but in practice it is almost impossible. UN staff and Russian government officials are discussing the extension in the background. Developments in this regard are closely monitored by the grain market.